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FCA confirms mortgage LTI threshold changes

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
08/07/2025
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FCA confirms mortgage LTI threshold changes

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“This is a step in the right direction to give smaller lenders more scope to support borrowers, but for some it might not be as much relaxation as they were hoping. The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have confirmed the threshold will rise to £150 million a year, up from £100m which was set back in 2014. This change has been carefully considered in line with ‘original risk appetite’. The changes take effect from 11 July 2025, and are expected to benefit around 80 lenders. There have been no other changes stipulated at this time, which might disappoint those who were hoping for a change to the loan-to-income (LTI) flow limit.

“Just last month, the CEOs from Yorkshire Building Society, Nationwide Building Society and Skipton Building Society collectively called for the LTI limit to be raised to 20% from 15% to allow them to lend to more potential homeowners. This was sent as a letter to the Treasury Committee and reaffirmed the point that building societies are responsible for 35% of first-time buyer lending. Mutuals have already pioneered innovative products to support first-time buyers, so it will be interesting to see how the latest changes will impact the mortgage market overall.”

The LTI flow limit ensures that mortgage lenders limit the number of new residential mortgage loans made with an LTI ratio at, or greater than, 4.5 to no more than 15% of their total number of new mortgage loans per annum.

FCA confirms mortgage LTI threshold changes

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“This is a step in the right direction to give smaller lenders more scope to support borrowers, but for some it might not be as much relaxation as they were hoping. The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have confirmed the threshold will rise to £150 million a year, up from £100m which was set back in 2014. This change has been carefully considered in line with ‘original risk appetite’. The changes take effect from 11 July 2025, and are expected to benefit around 80 lenders. There have been no other changes stipulated at this time, which might disappoint those who were hoping for a change to the loan-to-income (LTI) flow limit.

“Just last month, the CEOs from Yorkshire Building Society, Nationwide Building Society and Skipton Building Society collectively called for the LTI limit to be raised to 20% from 15% to allow them to lend to more potential homeowners. This was sent as a letter to the Treasury Committee and reaffirmed the point that building societies are responsible for 35% of first-time buyer lending. Mutuals have already pioneered innovative products to support first-time buyers, so it will be interesting to see how the latest changes will impact the mortgage market overall.”

The LTI flow limit ensures that mortgage lenders limit the number of new residential mortgage loans made with an LTI ratio at, or greater than, 4.5 to no more than 15% of their total number of new mortgage loans per annum.

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

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Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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